More than five years after receiving a $210 million bailout from the city, the El Paso Firemen and Policemen's Pension Fund has asked for more public money to solve a $270 million funding shortfall.

The move surprised some city officials and generated concerns about the fund's sustainability, setting the stage for a debate and negotiations over the viability of police and firefighter pensions and who's responsible for paying for them.

The El Paso Firemen and Policemen's Pension Fund has already asked the city to contribute about $4 million to the fund annually while its members would increase contributions by $3 million annually. The fund's leadership says its members are making sacrifices, too, just like in 2009 when they gave up $186 million in benefits in exchange for city money.

Some City Council members and the city manager's office are hesitant to dip deeper into an already stretched budget. The city has ordered an audit of the fund, looking for ways to solve the shortfall other than using taxpayer money.

Mayor John Cook says he wants to avoid adversarial negotiations and promises to fix the shortfall in his last 100 days in office. He will leave office in June.

"We must make this fund sustainable," Cook said. "Every mayor can't face this problem every five years. I cannot leave the system broken; we have to take care of our policemen and firemen in a fiscally responsible way."

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El Paso Firemen and Policemen's Pension Fund Board Chairman Lt. Tyler Grossman acknowledges that the fund is giving out more in benefits than it is taking in from investments and payments, partly due to a retiree membership of 1,400 and just about 1,800 current contributors. The fund has dropped below its ability to pay out benefits to retirees over the next 40 years and also is less than 80 percent funded.

The average pay in retirement is about $44,000.

An independent analysis in 2011 found the pensions unsound after a state-mandated study every two years. The fund, which combines both police and fire pensions, is underfunded by about $270 million.

The police fund's amortization period -- the number of years it would take to be fully funded -- is infinite, while the firefighters fund's sits at 76 years. Analysts put the benchmark at 40 years to deem the fund in good financial condition.

The pension's leaders now want the city to increase its yearly contribution rate to the fund while demanding more from its members.

"It's something we need to solve quickly because we can't let it get out of control," Grossman said. "Both sides were great in 2007, and we were praised around the country for it. We got $210 million from the city, and our retirement age increased from 45 and 20 years of service to 50 and 25 years of service. Also, anyone who joined the force in 2007 or later does not get a cost-of-living increase. We need both sides to come to the table again and make concessions."

The city is not ready to agree to a contribution increase as a solution. Some officials expressed uneasiness over the situation and wondered whether they can turn to the taxpayers again after voters recently approved $473 million quality-of-life bonds.

City Rep. Cortney Niland at a City Council meeting last month delivered a stern lecture about fiscal responsibility, questioning why the city, after solving the problem four years ago, would need to step in again. She questioned the pension's management and financial decisions.

"We can't keep doing this every four years," Niland said. "It's going to be a problem that we can't just keep dipping into the city's pockets."

The city may have no choice.

The pension's unfunded liabilities -- inability to pay out benefits over a certain time frame -- could damage the city's bond rating, affecting the quality-of-life bonds.

The fund draws money from both its members, who contribute a set percentage of their paychecks, and the city, which contributes at a fixed rate of all the combined salaries. The city contributes about 60 percent of the $1.1 billion pension fund, and gets five seats -- two appointed by the city manager and three appointed by the mayor -- on the 11-person board. The other six board members are elected by membership.

The funding inadequacy, officials from both sides agree, can be solved three ways: contribution rates, investment and management.

Citing its analysis report, the pension fund membership says an increase in contribution rates by both sides will fix what is a growing shortfall. The current proposal -- a recommendation from Buck Consulting, the same company the city pension fund uses -- increases the police contribution rate from 13.89 to 15.88 percent and the firefighters from 15.28 to 16.53 percent. The city would raise its rate from 18.5 percent for both fire and police funds to 21.14 for police and 20.02 for firefighters.

The rate increases would cost the city about $4 million annually, while drawing $3 million more from the pension fund's members, Grossman said. Those numbers, Grossman said, could drop, respectively, to $3.5 million and $2.5 million when good 2012 returns on investments are included.

Fund executive director Robert Stanton added the city has increased its contribution rate by only 0.5 percent since 1969 while the police and firefighters have more than doubled their rates.

"This is about finding a shared solution to a common problem," Stanton said.

Grossman and Stanton also say the city may be required to increase its contribution rate, pointing to state law. Former state Rep. Pat Haggerty and state Rep. Joe Pickett in 2007 passed legislation that said if the city raises its contribution rate, pension fund members must also do the same proportionately.

The impetus behind the state law was to prevent the 2007 division and debate that turned a $30 million deficit in the fund to close to $400 million.

"It's in the city's hands right now," Stanton said. "We let them know about this in October, and we're anxiously awaiting. This is a shared , and we've made our contribution, and state law says they should make one, too."

Both Wilson and Deputy City Manager Bill Studer, who sits on the fire and police pension fund board, dispute the idea that the city is required by state law to increase its contribution rate. They claim that if the city does increase its contribution, then pension fund members must do so, but not the other way around.

The law states that the city "may" increase its contribution rate and that, "to the extent that the city or town contribution rate increases É the member contribution rate must increase" proportionately.

Wilson also doubts that a $4 million increase in the city budget to fund the pension fund, about a 1-cent property tax, would be palatable to voters and council, especially during this economy.

"Quite frankly, I don't know if the council would be inclined to do something dramatic," she said. "If it was on the ballot, I'm not sure it would even pass."

As a result, Studer, Wilson and city Chief Financial Officer Carmen Arrieta-Candelaria, who also sits on the pension fund board, want to take a more holistic look.The city will audit the police and fire pension fund as it does every five years.

The city has already contracted Gallagher Benefit Services, the nationally recognized firm that developed the 2007 plan that solved the nearly $400 million pension fund deficit, to conduct an audit. Gallagher's report is expected to be back within two months.

"We need to identify the problem and then look at solutions," said Studer, who has worked with pension funds since 1978.

"These audit reports go back five years, so it includes two really bad stock market years in 2008 and 2009 and not 2012, when we made 15 percent on our investment. So do we need to do anything? Are there multiple solutions? Can we look at something else?"

Grossman is weary of the audit, raising questions of whether it will truly be an independent audit and whether the city already has a plan.

Wilson said she wondered whether other, less costly options might be available. She raised questions about management and investment strategies, citing a Wall Street Journal article that poses doubts about how the Texas Legislature mandates pension funding. The author, in an opinion piece, argues that in Texas, pension funds are controlled by independent trustees -- some with little financial background -- and not by the entity that actually funds the pension.

Just last month, the Texas Policy Foundation released a study critical of pension funds that have codified major aspects of their systems into state law because it's an obstacle to local control and oversight. El Paso's fire and police funds were on the list and the foundation's recommendation was to give back more control to the city.

Grossman countered that the El Paso funds just ranked second in Texas in return on investment during the past 20 years, according to the Texas Association of Public Employee Retirement Systems. But he acknowledges that investments aren't enough.

"We can't invest our way out of this," Grossman said. "We're simply giving out more than we're taking in, and that's depleting the fund."

Evan Mohl may be reached at emohl@elpasotimes.com; 546-6381. Follow him on Twitter @EvanMohl